Tencent CEO Ma Huateng, also known as Pony Ma, had harsh words for his employees at a town hall meeting last week, attacking them for inefficiency, laziness and a lack of attentiveness to cost-cutting.
You cant even survive as a business, yet youre chilling on the weekends, playing ball, Ma told his employees, reports Bloomberg.
The harsh words come at the end of a tough year-and-a-half for Tencent, the worlds largest video-game developer.
Tencent is one of Chinas largest tech companies, owning the ubiquitous WeChat platform used for messaging and payments throughout the country. It is also the developer behind some of the worlds most popular games, like smartphone game Honor of Kings, and has one of the industrys largest investment portfolios, with stakes in Fortnite developer Epic Games and Elden Ring developer FromSoftware (among many others).
In his town hall, Ma criticized almost every part of Tencents giant business. He accused the companys gaming division of focusing on quantity over quality, and complained about the companys social media products losing ground to competitors like Bytedances Douyin.
He suggested Tencent was too focused on expansion rather than focusing on its core businesses. What we added was just fat, and we were still unable to defeat others, he said, reports the South China Morning Post.
Ma even warned that longstanding services, like Tencents news portal, could be shut down. If they still have a lot of problems, then their time is limited, he said, according to the South China Morning Post.
The Tencent CEOs only kind words were for the companys short video service, offered through the WeChat platform, which he reportedly described as the hope for Tencent.
Tencent did not immediately respond to a request for comment.
Game over?
Tencents troubles began last summer when Chinese authorities ordered strict playtime limits for children. Minors were allowed to play for just three hours each week in a bid to prevent gaming addiction. Regulators also reportedly told gaming companies, like Tencent and its competitor NetEase, to clamp down on content censors deemed obscene and violent, such as money-worship and effeminacy.
Beijing then blocked Tencent from releasing a new video game for 15 months, denying the companys products the approval needed for release in China. The pause upended Tencents plans to release blockbuster games like Fortnite in the country. (Beijing finally approved a small health-focused game from a Tencent subsidiary in September, ending the drought.)
There may be some light at the end of the tunnel for Tencent. In late November, a research firm affiliated with Chinas gaming regulator stated that Chinas problem with gaming addiction had achieved a step toward resolution, implying that the gaming crackdown may be coming to a close, according to CNBC.
Yet Tencent now faces a slowing gaming market, both domestically and globally. Gaming sales skyrocketed during the COVID pandemic as customers stayed home due to social distancing, but a move to post-COVID life and a slowing economy are dragging down revenues across the industry.
Tencent reported $19.7 billion in revenue in the most recent quarter, a 2% decrease year-on-year. Shares in Tencent are down 57.7% from their peak in Feb. 2021.
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